Дорогие посетители! Если у Вас не воспроизводится в плеере видео, пожалуйста,
воспользуйтесь любым бесплатным VPN расширением для Вашего браузера.

STOCK SELL OFF - Save Or Invest? (What You Need To Know!)

8 Просмотры
Издатель
The stock market is selling off. This is a guide on how much you should save vs invest right now

► My Stock Portfolio + Stock Tracker: https://www.patreon.com/andreijikh
► Get 2 Free Stocks on WeBull (Valued up to $1400 when you deposit $100): https://act.webull.com/kol-us/share.html?hl=en&inviteCode=QhhB1aDNwEDP
► ROBINHOOD Free Stock: https://robinhood.c3me6x.net/c/1980551/671816/10402
► Open A Roth IRA: https://m1finance.8bxp97.net/c/1980551/696710/10646
► FREE Discord: https://discord.gg/Hff86m9
► Follow Me On Instagram: https://www.instagram.com/andreijikh/

The stock market is selling off, and there is a lot of fear when it comes to investing. People want to save their money rather than invest it, but is that really the best decision? That depends on where the economy and the stock market is going. One way to look at what the future may bring is something called the Velocity Of Money.

It measures how quickly money has been trading hands and for each dollar that’s printed and injected into our economy, exactly how much value we create in return over a given period of time. Look shows us right now, we are at an all time low for the velocity of money. That means people right now are NOT exchanging money as much as we’d like. When they aren’t trading money and spending it, we get a potential deflationary collapse. That means all asset prices like stocks and houses fall or “deflate” because there is a demand to save dollars which means relative to everything else, the dollar is going up in value because people are going to want more of them. To prevent this from happening, the Federal Reserve is trying to achieve a 2% per year inflation rate to keep asset prices growing.

Unfortunately, no one knows whether we’re going to see inflation first and then deflation. Or the other way around, it’s anybody’s guess. That makes it really hard to figure out how much to save vs invest because people get really scared and it makes them want to wait until we see what happens. But that’s not the best thing you can do right now, you should not wait, here’s a really perfect study case of why you don’t want to do that.

Consider 3 investors with the same strategy. Each started with $99,000 over the course of 41 years, they bought stocks, reinvested dividends, and never sold the stocks. When they weren’t buying stocks, they held their money in a savings account that gave them 3% returns per year.

Case Study #1: Tiffany, she saved her money until the day of the worst stock market crashes in history. She purchased at the top in 1987 losing (-33%), 1990 (-19.7%), 2002 (-49%), 2009 (-56.5%), and 2020 (-34.1%). After 41 years, the total value of her investments ended at $773,358. Not bad considering she bought at the worst possible times.

Case Study #2: Brittany, is the opposite of Tiffany. She’s a genius. She invested all of her saved money exactly at the bottom of the market. She predicted this 5 times in a row (virtually impossible). She bought all those stocks at a discount and her $99,000 ended up being worth $1,123,573. While that’s a lot of money, notice it’s not a huge difference between the best market timer, and the worst market timer. Why is that?

Case Study #3: Sarah, who didn’t buy at the market top or the bottom. She ignored all the noise, unsubscribed from every finance YouTuber, and invested $200 every single month into VTI or VOO starting in 1979 (even though those ETFs/Indexes didn't exist at that point). She ended up with the most in her brokerage account, exactly $1,620,708. This is because she didn't wait to start, and she let compound interest do the work for her much earlier than everyone else while getting the standard average returns in the stock market.

Case Study #4: Negative Nancy, she saved for 41 years in a high yield savings account at 3% because she was afraid of investing. She just left it in there for 41 years. In total, she ended up with only $332,000.

As far as how much you should invest, it's easy to figure out. It’s, it’s your annual expenses times 25 invested at 4% and that’s your goal if you can maintain the same level of lifestyle. Once you save 25x your annual spending, that 4% will equal to exactly 1 year of annual income in perpetuity.

The lesson here is never try to time the market, continue saving and more importantly, consistently investing instead of timing the market.

Links to resources:

Velocity of Money: https://fred.stlouisfed.org/series/M2V
Thank you to Reddit Personal Finance: https://www.reddit.com/r/financialindependence/comments/iq30q8/timing_the_market_absolute_worst_vs_absolute_best/

*None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.
Категория
Биткоин
Комментариев нет.
Яндекс.Метрика